Corporate Presentation June 2018
1 Eros the leading Indian film studio
Executive Summary Eros: A global leader in Indian film entertainment with strong box-office market share 1 2 3 4 5 130+ new releases in the last 3 fiscal years Large content library of Indian language films, 2,000+, and music Multi-platform model for content monetization Robust India macro landscape with highly attractive fundamentals Strong revenue growth and solid track of profitability PAGE 2
Content is King Hindi New film mix Co-production Acquisition Own IP Creation Regional language ErosNow Originals, Short films 2,000+ film library (1 year after Theatrical Release) PAGE 3
Eros: A Multi-channel monetization Model Theatrical Leading player in a growing and underpenetrated film market Investing in content driven films with high ROI potential Film pre-sales facilitated by long-standing Eros brand, reputation and industry relationships Television & Others Cable digitisation and rising Pay TV penetration drive market growth and demand for premium content Eros film library of over 2,000+ films is a stable source of revenue growth with high margins Television rights are often sold before box-office releases Other streams through theatrical and catalogue rights include Music, Cable and broadband syndication, in-flight sales, DVD sales, etc. Digital Exclusive content supplier to the fast growing OTT platform - ErosNow ErosNow, with 7.9m paying subscribers and over 100m registered users globally, is the leading Indian Film OTT Platform Expanding aggressively into digital content with ErosNow originals and short films Overseas Sale of international distribution and digital rights to the parent company benefits de-risking and cash flows Pre-determined recovery of significant film production cost through Eros International Plc Parent Company enjoys wide international distribution network across 50 countries Eros International is strategically positioned to monetise film content through multiple channels globally Theatrical $$$ $ AD $ TV Syndication Freemium Pay Per View Subscription Advertising Bundled Services PAGE 4
Deep and Longstanding Talent Relationships Select Leading Actors Amitabh Bachchan Shah Rukh Khan Salman Khan Ranveer Singh Deepika Padukone Priyanka Chopra Anushka Sharma 3 IIFA Awards 4 NFA Awards 5 IIFA Awards 1 IIFA Award 2 NFA Awards 3 IIFA Awards 4 IIFA Awards 1 NFA Award 3 IIFA Awards 1 NFA Award 3 IIFA Awards Select Leading Directors Sanjay Leela Bhansali Anand L. Rai Kabir Khan Raj & DK Anurag Kashyap Sujay Dahake 4 IIFA Awards 2 NFA Awards 1 BIG Award 1 Stardust Award 1 IIFA Award 1 NFA Award 2 IIFA Awards 1 NFA Award Note: IIFA = International Indian Film Academy. NFA = National Film Awards. PAGE 5
Industry defining partnership with Reliance Industries Eros International Media and Reliance Industries Ltd ( RIL ),India s largest private sector company, announced the creation of a joint film fund to co-produce and consolidate Indian content o The new partnership will look to invest Rs 1,000 crore ($150mn) in the near-term to produce and acquire Indian films and digital originals across all languages RIL has also agreed to subscribe a 5% equity stake in our parent company, Eros International PLC at a price of $ 15 per share in February 2018 (18% premium to most recent close price) A Mutually Beneficial Strategic Partnership with India s Largest Conglomerate to Consolidate Indian Content Content Distribution Capital Engagement Investment to dramatically scale Eros capabilities in content production, marketing, and distribution Symbiotic relationship with Reliance s Jio to create high efficient unit economics for the ErosNow OTT platform Reliance s production expertise to further bolster expansion and development of Eros original and short form content PAGE 6
2 Our markets
India: Fast Growing Film and Television Market Indian Film and Television Market Projected to Grow at 13% (Rs. In Billions) 16 21E CAGR 1,373 13% 1,055 1,207 192 207 8% 730 142 588 806 155 651 917 166 751 178 877 1,015 1,166 15% 2016A 2017E 2018E 2019E 2020E 2021E TV Film (Theatrical) (1) Source: FICCI KPMG Report. PAGE 8
High Growth and Attractive Fundamentals A rapidly growing economy (1) With significant population expansion (2) 7.4% 6.6% (in billions) 1.6 1.3 2.9% 1.6% 2.3% 1.0 India China US UK Brazil 2000 2017 2050 Highly favorable demographics (2) Increasing annual consumer expenditure (3) 39.3 37.1 Median age 31.6 27.6 (Rs. crore) 7,132,430 7,496,663 8,026,573 8,385,830 9,001,599 10,114,639 Russia China Brazil India 2012 2013 2014 2015 2016 2017 Over the next 15 years India is expected to be the largest contributor of global GDP growth (1) IMF World Economic outlook 2018 (2) CIA World Factbook (8/2/2017) (3) Euromonitor International 1 USD Rs. 67.41 (as on May 29, 2018) PAGE 9
Number of Movies Produced Rapid Growth for India s Film Industry More Movies Made, and More Tickets Sold in India Than Any Other Country India - a highly underpenetrated market (2) 2,500 (2016A 1 ) Theatre screens per million population 2,000 1,500 India 125 1,000 500 0 Japan UK France South Korea China USA 0 500 1,000 1,500 2,000 2,500 Annual Tickets Sold (mm) 8 10 Multiplex rollout fueling growth (2) and substantial room to increase pricing (3) 16 40 India Brazil China South Korea 60 UK US Number of Multiplexes in India (Rs.) Average Admissions Price 2,750 1,028 925 1,225 1,500 2,100 190 308 393 458 517 635 2009 2011 2013 2015 2017 India China Brazil Russia US UK Japan (1) Eros Plc data, UNESCO Institute for statistics, Film Federation of India, Wall street research - Size of circles scaled to represent Number of Movies Produced x Annual Tickets Sold (2) FICCI-E&Y 2018 Report (3) India ticket price represents average ticket price at two leading multiplex chains as on March 2017. PAGE 10
Growing Indian Television Market Increasing television household penetration (1) is Expected to Fuel Growth in the Indian TV Industry (1) Paid C&S TV Household Penetration (%) 84% 81% (Rs in billion) 594 351 243 862 494 368 Total # of TV Households: 2016A 175m 2021P 200m 2016A Advertising Revenue 2020E Subscription Revenue (in millions) Willingness to pay for content (1) Paid C&S TV Household...is Supported by Favorable Viewing Preferences (1) Percentage of viewing time spent 45% 42% 36% 70+% 147 164 22% 12% 11% 7% 7% 2016A 2021P Hindi GEC + Movies Regional GEC + Movies Kids + Music News 1) Source: FICCI Report 2017, 2018 2014 2015 PAGE 11
Compelling Digital Trends, Underpinned by Mobile In December 2017 India Reached 1.2 Billion Mobile Phone Subscribers, with Only 25% Smartphone Penetration A Young, Technologically Savvy Demographic Strong Mobile Internet User Growth 27% Internet Penetration 1 Median Age 87% Internet 3G: 17% Millions 2 Penetration 1 4G: 8% 37.9 3G: 50% 4G: 30% 969 27.6 389 2016A 2021E Video Dominates Mobile Internet Usage in India Mobile Internet Usage in India (2017E) Streaming Audio 10% Web and Other Data 39% File Sharing 2% Video 49% 75% by 2021E A Handful of Telcos Control the Market Wired & Wireless Broadband Market Share (Dec-2017A) 44% 95% Wireless Subscribers 20% 15% 10% 6% Jio Airtel Vodafone Idea BSNL Source: FICCI KPMG Report, CIA World Factbook, Telecom Regulatory Authority of India, Ericsson Mobility Report, Statista. Note: Vodafone India and Idea Cellular merger pending. 1. 2016A. 2. Includes non-smartphone mobile internet users. PAGE 12
The Big Regional Opportunity Language No. of films released in 2014 Top Grossing Film Worldwide Box Office INR & USD Typical Production Budgets Typical Print & Advertising Hindi 141 Dangal 1,870 cr ($291m) $ 12-15m $3.0m Tamil 203 Enthiran 283 cr ($44.2m) $ 10-12m $0.7m Telugu 113 Baahubali 2 1,560 cr ($238m) $ 8 10m $0.5m Kannada 118 Aptharakshasa 55 cr ($8.6m) $ 4 5m $0.2m Malayalam 151 Drishyam 75 cr ($11.7m) $ 1.5 2.5m $0.2m Marathi 56 Sairat 110 cr ($16.7m) $ 1 2m $0.2m Bengali 68 Chander Pahar 15 cr ($2.3m) $ 0.5 1m $0.1m Punjabi 41 Chaar Sahebzaade 70 cr ($11m) $ 1.5 2.5m $0.2m Others 101 Over 1,000 films are released in India each year across languages The box office numbers suggest these are not niche films. Contributions are significant Varying Budgets. Low P&A. High Margins and Presales In the context of shortage of theatres, the Regional strategy adds scale, market share and margins without cannibalization PAGE 13
A digital opportunity3
ErosNow (1) : 100m registered users and 7.9m paying subscribers worldwide (2) Strong registered user base (m) 60 68 75 80 100 Q4 FY'17 Q1 FY'18 Q2 FY'18 Q3 FY'18 Q4 FY'18 Unique Distribution Model ErosNow Originals 2.1 Rapid growth in paying subs (2) (m) 5 3.7 2.9 7.9 Q4 FY'17 Q1 FY'18 Q2 FY'18 Q3 FY'18 Q4 FY'18 Note: (1) ErosNow is parent, Eros International Plc s, OTT platform (2) Paying subscribers means any subscriber who has made a valid payment to subscribe to a service that includes the Eros Now service either as part of a bundle or on a standalone basis, either directly or indirectly through a telecom operator or OEM in any given month be it through a daily, weekly or monthly billing pack, as long as the validity of the pack is for at least one month PAGE 15
ErosNow (1) : Large and Growing Addressable Market 135 Countries inc. India Our Addressable Market is a Quarter of the World Population 100M Registered Users 7.9M Paying Subscribers 10,000+ Digital Rights Note: (1) ErosNow is parent Eros International Plc s, OTT platform PAGE 16
ErosNow (1) - Unique distribution model Major Indian Telco Partnership Director to Consumer and Other OEM Streaming 160mm Subs 290mm Subs 213mm Subs 196mm Subs Parent Company Market Capatilization 1 $80bn $75bn $26bn $5bn EROS Now Exclusive SVOD Partner Long-Standing Partnership Major Indian Telco Partnerships Underpin Sustainability of ErosNow s Moat Exclusive Partnerships for Eros Now, and Access to the Largest and Most Linguistically Diverse Digital Indian Film Library for Telcos Other TELCO / ISP WALLETS (Partner Channel) Note: (1) ErosNow is parent Eros International Plc s, OTT platform International PAGE 17
Cutting Edge ErosNow (1) Originals Note: (1) ErosNow is Eros International Plc s, OTT platform PAGE 18
Select Forthcoming Releases Film Name Star Cast/(Director/Producer) Language Tentative Release Good Night City Rituparna Sengupta, SaswataChatterjee (KamaleswarMukherjee) Bengali Q1 FY2019 Bhavesh Joshi Harshvardhan Kapoor (Vikram Motwane / Phantom Films) Hindi Q1 FY2019 Manmarziyaan Abhishek Bachchan, Vicky Kaushal, Tapsee Pannu (Anurag Kashyap / Colour Yellow Productions) Hindi Q2 FY2019 Happy Pill Ritwick Chakraborty, Sohini Sarkar (Mainak Bhowmick) Bengali Q2 FY2019 Happy Phir Bhaag Jayegi Sonakshi Sinha, Abhay Deol, Jimmy Shergill (Mudassar Aziz / Colour Yellow Productions) Hindi Q2 FY2019 Kishore Kumar Jr. Prosenjit Chatterjee, Aparajita Adhya (Kaushik Ganguly) Bengali Q3 FY2019 Mumbai Pune Mumbai 3 Swapnil Joshi, Mukta Barve Marathi FY2019 7 Kadam Amit Sadh, Diksha Seth, Ronit Roy & Others / (Mohit Kumar Jha) Hindi FY2019 Haathi Mere Saathi Rana Dugabatti (Prabhu Soloman) Hindi / Tamil / Telugu FY2019 Ticket to Bollywood Amyra Dastoor, Diganth Manchale / (Eros) Hindi FY2019 Kaptan Saif Ali Khan, Zoya and others (Navdeep Singh / ColourYellow Productions) Hindi FY2019 Nervazhi Nayanthara (Bharath Krishna) Tamil FY2019 Untitled (Homi Adajania / Maddock Films) Hindi FY2019 Jaita Harman Baweja (Harry Baweja) Hindi FY2019 Guru Tegh Bahadur (Harry Baweja) Punjabi FY2019 Kaamiyab Drishyam Films Hindi FY2019 Cobra Gautam Ghulati, Tarun Khanna, Nyra Banerjee, Ruhi Singh, Director - Munesh Rawal Hindi FY2019 Untitled Ravi Vasudevan Malayalam FY2019 Annum Pennum Rajish Parameshwaran Malayalam FY2019 Untitled Vijith Nambiar Malayalam FY2019 - The above list is indicative and subject to change Strong releases YTD set to be bolstered by additional highly anticipated titles in the coming years PAGE 19
Select Forthcoming Releases Film Name Star Cast/(Director/Producer) Language Tentative Release Panda (Indo-China) (Kabir Khan) Hindi FY2020 Tannu Weds Manu 3 Anand L Rai Hindi FY2020 Chandamama Door Ke Sushant Singh Rajput, Nawazuddin Siddiqui (Sanjay Puran Singh) Hindi FY2020 Pitch White (Vipul Shah) Hindi FY2020 Untitled (Rahul Dholakia / Next Gen Films) Hindi FY2020 Ankhen 2 Amitabh Bachchan & Others Hindi FY2020 Heer (Colour Yellow Productions) Hindi FY2020 Fake (Raj & DK) Hindi FY2020 Re-Union (Sujoy Ghosh) Hindi FY2020 Hera Pheri -3 Suniel Shetty and others Hindi FY2020 Phobia 2 (Next Gen Films - Pawan Kriplani) Hindi FY2020 Shubh Mangal Savdhan - 2 (Colour Yellow Productions) Hindi FY2020 2 Guns (Krishna Jagarlamudi) Hindi FY2020 R. Rajkumar 2 (PrabhuDeva / Next Gen Films) Hindi FY2020 Khalifey Sanjay Dutt, SaifAli Khan, Arshad Warsi (Prakash Jha) Hindi FY2020 Make in India (Next Gen Films) Hindi FY2020 Jugaadu Harman Baweja Hindi FY2020 1234 (Part 2) SunielShetty, Paresh Rawal (AshwniDhir) Hindi FY2020 - The above list is indicative and subject to change Strong releases YTD set to be bolstered by additional highly anticipated titles in the coming years PAGE 20
Forthcoming films to premier on ErosNow (1) in addition to the Eros film slate In addition, we plan to release ~20 short form web series, 15 Short films, as well as 6 digital films Note: (1) ErosNow is Eros International Plc s, OTT platform PAGE 21
4 Financial Overview
Q4 & FY2018 Figures in INR million Q4 FY2018 Q4 FY2017 Growth (%) FY 2018 FY 2017 Growth (%) Total Income 2,578 2,104 22.5% 10,100 14,453 (30.1%) EBIT 1,066 660 61.5% 3,679 3,768 (2.4%) EBIT Margin 41.3% 31.4% +990 bps 36.4% 26.1% +1030 bps Adj. EBITDA (1) 1,486 839 77.0% 4,516 4,232 6.7% Adj. EBITDA Margin 57.6% 39.9% +1770 bps 44.7% 29.3% +1540 bps PAT (after minority) 608 337 80.4% 2,293 2,575 (11.0%) PAT Margin (%) 23.6% 16.0% +760 bps 22.7% 17.8% +490 bps Diluted EPS (Rs.) 6.31 3.53 78.8% 23.92 27.00 (11.4%) In FY2018, Eros sharpened its focus on profitability by investing in content driven films with high ROI potential and low risk profile. As a strategy, we steered away from high budget films due our stringent green-lighting and budgeting processes Revenues during the period were driven by releases of Mukkabaaz, Raid (Overseas), Ribbon, Rukh, Kadvi Hawa, Shubh Mangal Savdhan, Newton, Munna Michael, Sniff, Sarkar 3, Aamhi Doghi (Marathi), Rong Beronger Kori (Bengali), Oru Kidayin Karunai Manu (Tamil), Tujha Tu Majha Mi (Marathi), Aake (Kannada), Posto (Bengali), Projapati Biskut (Bengali), Baap Janma (Marathi), Boss 2 (Bengali) amongst others reinforcing the portfolio and film mix strategy Note: (1) Adjusted EBITDA is defined as EBITDA adjusted for impairments of available-for-sale financial assets, profit/loss on held for trading liabilities (including profit/loss on derivatives), transactions costs relating to equity transactions, and share based payments. PAGE 23
Growing content investments with a conservative Balance Sheet Figures in Rs. million March 31, 2018 March 31, 2017 Gross Debt 7,429 6,635 Cash 1,872 1,789 Net Debt 5,557 4,846 Net Worth (Equity) 22,559 20,044 Net Debt / Equity Ratio 0.25 0.24 Net Debt / EBIT Ratio 1.51 1.29 Eros investments are focused on enhancing its position as a premium content owner of Indian film and digital content while maintaining a conservative balance sheet Eros capital structure and coverage ratios continue to remain well within the prescribed norms The increase in net debt of the company is a result of investments in its film content and growing slate of ErosNow originals Eros remains focused on its film pipeline, with 40 50 films across languages slated to release during this financial year PAGE 24
Consistent Profits; strong growth in margins EBIT & Margin CAGR: 12.5% (Rs. in million) 36.4% 22.5% 23.4% 21.1% 26.3% 25.1% 21.8% 26.1% Diversified Revenue Streams FY18 1,613 2,257 2,262 2,997 3,615 3,549 3,768 3,679 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Television & Others 46.3% Theatrical 42.8% PAT & Margin CAGR: 10.1% 16.5% 15.5% 14.5% 17.5% 17.1% 14.7% 17.8% (Rs. in million) 22.7% Overseas 10.9% 1,172 1,478 1,545 1,997 2,471 2,387 2,575 2,293 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 PAGE 25
Important notice and disclaimer Certain statements in this presentation concerning the future growth prospects are forward looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. In some cases, these forwardlooking statements can be identified by the use of forward-looking terminology, including the terms believes, estimates, forecasts, plans, prepares, projects anticipates, expects, intends, may, will or should or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this presentation and include, but are not limited to, statements regarding the Company s intentions, beliefs or current expectations concerning, among other things, the Company s results of operations, financial condition, liquidity, prospects, growth, strategies, business development, the markets in which the Company operates, expected changes in the Company s margins, certain cost or expense items as a percentage of the Company s revenues, the Company s relationships with theater operators and industry participants, the Company s ability to source film content, the completion or release of the Company s films and the popularity thereof, the Company s ability to maintain and acquire rights to film content, the Company s dependence on the Indian box office success of its films, the Company s ability to recoup box office revenues, the Company s ability to compete in the Indian film industry, the Company s ability to protect its intellectual property rights and its ability to respond to technological changes, the Company s contingent liabilities, general economic and political conditions in India, including fiscal policy and regulatory changes in the Indian film industry. By their nature, forwardlooking statements involve known and unknown risk and uncertainty because they relate to future events and circumstances. Forward-looking statements speak only as of the date they are made and are not guarantees of future performance and the actual results of the Company s operations, financial condition and liquidity, and the development of the markets and the industry in which the Company operates may differ materially from those described in, or suggested by, the forward-looking statements contained in these materials. The forward-looking statements in this presentation are made only as of the date hereof and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of current or future events or otherwise, except as required by law or applicable rules. PAGE 26